What will Andy Burnham’s premiership mean for UK wealth?
We ask the experts what the new Labour PM’s policies might mean for HNWIs
The UK has just welcomed Andy Burnham as its seventh Prime Minister in a decade; an appointment that will inevitably bring changes for assets and how high-net-worth individuals (HNWIs) manage their portfolios.
Burnham kicked off his premiership by announcing a tax cut – the five per cent VAT added to electricity bills will be removed from 1 October for six months. While this will provide relief for the average UK household, numerous tax hikes are likely to be coming down the track that could directly affect HNWIs.
Neill Pemberton, partner and head of commercial property at Goughs Solicitors, believes Burnham’s choice of John Healey for Chancellor of the Exchequer is a sure sign that his government will spend more, not less, during his time at Number 10. “Healey resigned as Defence Secretary in June over what he considered inadequate defence spending. His appointment points to significantly higher public expenditure at a time when UK borrowing costs are already elevated,” says Pemberton.
“Unless Burnham is willing to make some politically unpalatable cuts elsewhere, particularly to welfare spending – something his own backbenchers are unlikely to tolerate – tax rises will become the obvious answer.”
HNWIs are unlikely to be impacted in the near term. Rules on pension funds falling into individual estates from April 2027 are “yet to fully bite”, Pemberton notes, leaving “relatively little left to squeeze politically without creating significant backlash.”
However, HNWIs should still be prepared for a raft of potential changes to tax rules. These could be announced in the coming weeks but almost definitely in Burnham’s first Autumn Budget, which is expected to be delivered in October.
What could be announced?
Capital gains tax: The tax paid on profit made from the selling and disposing of assets could be overhauled. Burnham said on his campaign trail in June that he will look “in detail” at bringing capital gains tax in line with income tax bands. For HNWIs, this could mean paying more tax, but it’s a move that could see the government end up collecting less tax if HNWIs decide to hold on to their assets for longer.
Inheritance tax: There’s been plenty of speculation about what will happen with IHT. In 2023, Burnham suggested replacing the 40 per cent IHT rate with a flat 10 per cent ‘care levy’ on estates to fund a National Care Service. In June, Burnham told The Guardian that he “wouldn’t flinch” from making changes in relation to IHT and care charges.
Land tax: Burnham has spoken in favour of an annual charge based on the value of land, suggesting that its introduction could allow council tax and stamp duty to be scrapped. As has been widely reported, Burnham told LBC back in 2022 that a land tax would be a “very productive form of taxation because you make sure land is used for good, productive purposes”. The aim would be to discourage people from “sitting on [land] and hoarding it”.
Property tax: An alternative to a land tax being floated is a flat-rate charge on the value of properties. The mooted tax, proposed by the Fairer Share Campaign, would be 0.48 per cent, while owners of second homes and empty properties would pay 0.96 per cent.
There have also been reports that Burnham could lower the mansion tax threshold from £2 million to £1.5 million. Known as the High Value Council Tax Surcharge, it was announced by former Chancellor of the Exchequer Rachel Reeves in last year’s Autumn Budget and will come into force in April 2028.
Could a separate ‘wealth tax’ be on the cards?
There have long been calls for a tax on the wealthy. Tax Justice UK has been campaigning for an extra two per cent charge on estates worth more than £10 million for more than five years. Burnham hasn’t explicitly ruled one out either, telling Gary Lineker’s Goalhanger podcast earlier this month that HNWIs may have to be asked to pay “a little more".
A study by academics at King’s College London and the Paris School of Economics has forecast that an additional two per cent tax on the richest households – those with more than £100 million in wealth – would raise £10.4 billion in 2026 alone.
“Burnham seems to be keeping his powder dry on a wealth tax,” says Warren Johnson, founder of W Communications, a PR agency with a specialist division that deals exclusively with HNW consumers, and whose clients include Bentley, Cunard and Marriott Luxury Group, as well as several private family offices. “But every day that stays open is a day more capital heads for the exit.”
Can Burnham prevent a wealth exodus?
Experts seem to agree that Burnham should ideally provide clarity on the tax situation as soon as possible. The UK tax landscape feels like it’s shifting every few months, says Johnson. “Money doesn’t wait around for the next Budget to find out what it owes.”
Roger Gherson, senior partner at Gherson Solicitors LLP, agrees, arguing that the UK government’s decision to “continually move the fiscal goalposts gives very little security to those thinking of coming to the UK and to those who are still here.”
Thousands of HNWIs have rushed for the exit since the end of the non-dom tax regime in April last year, says Gherson. Based on conversations he’s had with bankers, he believes more are actively moving assets abroad and seriously considering relocating later this year ahead of sweeping tax reforms.
When HNWIs do relocate they take their “family office decision-making capacity with them,” Johnson adds. If the UK wants to stop capital from flowing overseas, be it to Dubai, Geneva, Milan or elsewhere, then Burnham needs to “usher in an era of [financial] predictability”.
